Chuck Scheper, Bexion Pharmaceuticals chairman, with a sample vial of BXQ-350, a cancer-fighting drug the company has developed. / The Enquirer/Patrick Reddy

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Chuck Scheper is chairman of Bexion Pharmaceuticals. Ray Takigiku is president and CEO. They are at one of the company's Covington labs. / The Enquirer/Patrick Reddy

Kentucky’s money match

Kentucky provides up to $500,000 in matching money for startups that have won federal Small Business Innovation Research grants. The federal research program helps small businesses explore their technological potential and push toward commercialization. Bexion has secured four SBIR grants totaling $1.8 million to study prostate, pancreatic and brain cancers. The state has matched that with more than $1.2 million. It’s unclear whether the state program will allow it to match any portion of Bexion’s $2.9 million SBIR “Bridge Award.”

How Bexion’s compound works

When healthy cells turn cancerous, a fat molecule called phosphatidylserine (PS) flips from just inside the cell’s membrane to its outside surface. All cancer cells appear to “externalize” PS. This attribute may help tumor cells evade the body’s immune defense system and could promote their migration from one site to another. Bexion’s lead compound, BXQ-350, targets this externalized PS, causing a series of biochemical reactions that cause the cancer cell to die. In animal studies, BXQ-350 has been used to detect and treat a broad range of cancers.

Bexion Pharmaceuticals, the local startup that’s working to revolutionize cancer treatment, has won a prestigious $2.9 million award from the National Cancer Institute that will allow it to start testing its drug on humans early next year.

The grant helps Covington-based Bexion advance with a potential breakthrough drug that holds promise for fighting pancreatic cancer and certain brain tumors – two of the most devastating cancers and among the most difficult to treat.

The grant also is powerful validation for this region’s ability to create and grow startups that might make a global impact.

The NCI traditionally has awarded its Small Business Innovation Research “Bridge Awards” to elite East and West Coast companies whose work is deemed especially promising. Bexion is one of only two recipients so far this year and one of just 15 since the program started in 2009. The NCI’s intensive process includes personal vetting from director Dr. Harold Varmus, a Nobel Prize winner for his studies on the genetic basis of cancer.

“It validates our unique approach to cancer therapy. The potential benefit to affected patients could be considerable,” said Bexion CEO Ray Takigiku, a former director for Procter & Gamble Pharmaceuticals.

Bexion’s drug has shown early results in causing cancer cells to destroy themselves while leaving healthy cells unharmed in animal testing. Current cancer treatments often include surgery, long rounds of radiation and chemotherapy, and bone-marrow transplants.

Getting this far has been an achievement of its own for Bexion’s team. Fewer than 10 percent of drugs that undergo animal testing ever make it to phase 1 human trials.

And its challenges are just beginning. About 10 percent of drugs that get this far ultimately gain U.S. Food and Drug Administration approval, a total that drops to 4.7 percent for cancer drugs, according to a 2011 study.

Bexion already has beaten the odds in an industry dominated by companies that spend hundreds of millions of dollars every year on drug development. Kentucky Gov. Steve Beshear said the award is “further proof of the tremendous promise” that Bexion represents.

Bexion, which has six full-time employees, has done it thanks to Takigiku’s vision and leadership, $6 million of federal and state support, and leaders in Covington’s business community who leaned in at a critical juncture for the company.

“It’s an incredible statement for the state of Kentucky and also for the city,” Bexion chairman Chuck Scheper said. “It’s great to be able to tell a story about a company that hopefully is moving forward with some breakthrough technology.”

Compound discovered in 2002 at our Children's Hospital

Later this year, Bexion plans to file an Investigational New Drug Application (IND) with the FDA, which has 30 days to conduct a review. In that application, Bexion must disclose how the drug is manufactured and characterized, results of its animal testing, and plans for human testing.

Its drug is based on a compound called BXQ-350. Geneticist Xiaoyang Qi, now a researcher and professor at the University of Cincinnati’s College of Medicine, discovered the compound in 2002 at Cincinnati Children’s Hospital Medical Center.

Transforming the compound into a drug that’s suitable for humans has been a major engineering and chemistry challenge compounded by manufacturing delays, Takigiku said.

“One of the things about drug development is there are no do-overs. It’s scary from a technology point of view, but it’s also scary from a drug development point of view,” he said. “The good news is we ended up with something that I believe meets FDA requirements.”

Bexion partnered with Lexington-based Coldstream Laboratories to manufacture its drug, which is a powder that will be mixed with distilled water and injected into patients intravenously. Bexion is in talks with four sites – University of Cincinnati, Ohio State University, Cleveland Clinic and Georgia Regents University – to conduct the trials.

“You never can really predict” how things will go, said Dr. Olivier Rixe, an oncologist at Georgia Regents Health System who has 20 years of experience in drug development. “But this is one of the most impressive set of data I’ve had the opportunity to review in animals, which makes (Bexion’s) drug extremely promising for phase 1.”

Phase 2 cancer trials typically include 40 to 60 patients and measure the drug’s efficacy on a specific type of cancer. If Bexion’s drug advances to phase 2, Rixe said the potential to help patients with pancreatic cancer or brain tumors is especially exciting.

“There are tons of ongoing drugs for breast cancer and lung cancer, but there are minimal agents being tested for brain tumors and pancreatic cancers,” said Rixe, who previously served as director of UC’s Experimental Therapeutics Program, and research director of UC’s Brain Tumor Center.

“And those two cancers are just devastating. So what an opportunity for the patients to finally have access to innovation and hopefully something that makes a significant impact on their lives.”

Phase 3 cancer trials involve many more patients and compare the new treatment’s efficacy against existing treatments. Typically a company can go to the FDA for final approval after a successful phase 3 trial.

Even if everything goes perfectly, Bexion is many years away from having a drug on the market. The odds, of course, are against avoiding bumps in the road. Bexion initially planned to start phase 1 testing in mid-2011. But the company is focused on looking ahead.

“Phase 1 testing is closer than it’s ever been. We can see light at the end of the tunnel,” said Margaret van Gilse, Bexion’s vice president of business development.

Bexion's start: A coming together of ideas and funding

That’s because a network of public and private resources has kept Bexion moving in the right direction. Start with Takigiku, who left P&G in 2006 when it became clear the company was getting out of the pharmaceutical business.

“I wanted to start my own thing. I was 48, so I knew that if I didn’t do it then, I probably was not going to have the chance to do it,” Takigiku said.

To make ends meet, Takigiku formed a consultancy with Nigel Ferrey called bioLOGIC, which has since evolved into a life science accelerator. Bexion works out of bioLOGIC’s offices on Russell Street.

Kevin Xu, P&G alum and Bexion vice president of global operations, told Takigiku about Qi’s cancer research at Cincinnati Children’s Hospital Medical Center. By 2006, Qi had done basic testing on mice; the compound showed promise. As importantly, it didn’t seem to hurt the animals.

“Most drugs, by the time they get put into animals, don’t fail because of efficacy. They fail because of some side effect or toxicity,” Takigiku said. “The fact that he didn’t see anything bad in animals was encouraging.

Takigiku and Xu formed Bexion in 2006 and licensed the technology from Cincinnati Children’s, which has an equity stake in the company. Bexion needed money and initially focused on federal Small Business Innovation Research grants. Bexion secured enough funding to conduct more animal studies, and in 2008 it moved from Cincinnati to Covington, because Kentucky has an SBIR matching funds program.

By 2009, Bexion was in line for a $400,000 investment from nonprofit Kentucky Science and Technology Corp., but it had to raise a match from private investors. Van Gilse called Scheper, who is her cousin. The call would become another critical point in Bexion’s history and demonstrates the importance an engaged business community has for startups.

Enters a new era with backing of a Nobel Prize winner

Scheper is a Covington native who retired as chief operating officer at Great American Financial Resources in December 2010. He also overcame stage 4 non-Hodgkin’s lymphoma as a 39-year-old in 1992. His treatment included aggressive chemotherapy and total-body radiation, as well as a bone-marrow transplant. He’s been cancer-free ever since.

Scheper was impressed with Takigiku and Bexion’s technology and called four friends, including Corporex Companies chairman Bill Butler, to help raise the $400,000 match. Scheper ended up closing a $2.5 million round instead.

“Bill Butler asked the right question: ‘What do we really need to do to get to the next level?’ ” Scheper said.

Scheper and Butler joined the board, with Scheper becoming chairman.

“I’d accomplished a lot from a business perspective. I wanted to do something more significant in my life, and all of this came together,” Scheper said. “It’s been an incredible opportunity.”

The board also includes former FDA commissioner Lester Crawford and Dr. Cameron Durrant, a pharmaceutical executive with extensive experience.

Bexion allowed Scheper to combine lessons from a successful business career with his personal experience. His focus has largely been to ensure the company is adequately funded so Bexion’s scientists can focus on their work.

To date, the company has raised $10 million, primarily from friends and family, as well as some equity investments from Kentucky and Ohio. Bexion’s federal and state grants total another $6 million.

Takigiku adds that Scheper brings another critical quality to Bexion: credibility and the ability to work at the highest levels in business and government.

“This is where a lot of startups do have some ego problems,” Takigiku said. “Having a person in your company at a senior level who has established credibility in different places is irreplaceable.”

Bexion now enters a new era with the backing of a Nobel Prize winner. And seven years after co-founding the company, Takigiku marvels at far it’s come.

“A lot of kids grow up thinking they want to cure cancer. I never really seriously entertained that idea. What I really entertained was the notion that I would have my hands on an important drug at some time,” he said.

“I was a little bit cautious when we started Bexion, but I thought, ‘We’ll see whether or not this really starts to bear fruit.’ ” ■

How Bexion's compound works

When healthy cells turn cancerous, a fat molecule called phosphatidylserine (PS) flips from just inside the cell’s membrane to its outside surface.

All cancer cells appear to “externalize” PS. This attribute may help tumor cells evade the body’s immune defense system and could promote their migration from one site to another.

Bexion’s lead compound, BXQ-350, targets this externalized PS, causing a series of biochemical reactions that cause the cancer cell to die.

In animal studies, BXQ-350 has been used to detect and treat a broad range of cancers.

Source: Bexion Pharmaceuticals

Bexion Pharmaceuticals

Bexion Team Members include six full-time employees and a mix of advisers and consultants. They are:

Co-founder and CEO: Ray Takigiku

Development and manufacturing of BXQ-350: Ellen Monson, senior vice president, and Tom Wei, vice president

Pre-clinical toxicology: Charlie Cruze, consultant

Science adviser: Nilabh Chaudhary

Analytical lab: Erin Molden and Kyle Buller

Fundraising and business development: Chuck Scheper, chairman of the board; Margaret van Gilse, vice president; and Will Geisen, research analyst

Administration: Cassie Cottrill

I will give you a new perspective on local executives and the region's entrepreneurs – and why both matter to you. Find me at LinkedIn, Facebook and jpichler@enquirer.com.